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Data released Thursday by the Fed showed the loan balance under its Main Street Lending Program rose to $14 million on Wednesday from $12 million a week before, when the central bank acquired the first loan originated under a facility that has taken months to roll out.
The program, designed to assist small and medium-sized companies hurt by the coronavirus crisis, has had a sluggish start, and the Fed has faced criticism from U.S. lawmakers for the weak uptake so far. The Fed recently adjusted the terms to allow nonprofit organizations to qualify.
The Fed’s total balance sheet size rose by $6.1 billion to just over $7.01 trillion as of July 22.
It was largely due to continued purchases of Treasuries and mortgage-backed securities aimed at keeping financial market conditions easy. These were nearly offset by a drop in foreign currency swaps with other central banks, which fell to their lowest since mid-March at just under $122 billion.
Meanwhile, other facilities aimed at steadying credit and other financial markets continued their recent pattern of limited demand following an initial explosion in their use in March when the Fed cut interest rates to effectively zero and launched a range of emergency credit programs. That powered a $3 trillion increase in the Fed’s total balance sheet between the beginning of March and early June.
Despite the recent lull, analysts at TD Securities said in a note they still expect the total balance sheet to hit $9.4 trillion by year end and $11 trillion by the end of next year.